Ok, the problem is gdm. I can `startx`, but gdm fails to load with fglrx, and there is no indication in any log as to why.
This continues with new 7.11 Catalyst driver.
Because of this, the problem is NOT with the driver, rather it is the default GDM time value of 10-seconds. To remedy:

vi /etc/gdm/custom.conf
[daemon]
GdmXserverTimeout=60

This allows enough time for X to startup before gdm considers it dead and aborts the X startup process.